Feeling that you’ve missed the investing boat is a common worry, particularly among those who are new to the world of finance and markets.
When it comes to investing, age isn’t the main game. What truly matters is the length of time you’re planning to keep your money invested.
The impact of investment timeframes
When you’re looking at an extremely short-term investment horizon, say for instance, the upcoming six months, it could indeed be a challenging venture. Short timeframes can expose your investments to greater volatility and the potential for profits may be relatively lower.
However, there’s a common misconception that age is a barrier to entry in the investment world. And investing isn’t a young person’s game. In fact, more than 95% of Warren Buffett’s net worth came after his 65th birthday.
The power of compound growth
One of the most compelling aspects of long-term investing is the power of compound growth. Compound growth is simply the process where your investment earns returns, not only on the initial amount you’ve put in, but also on the returns that your money has already made. It’s like rolling a snowball down a hill – it continues to grow in size as it collects more snow.
Similarly, with a consistent return of five to 10 per cent per year, compounded over a span of five or 10 years, your wealth can significantly multiply.
“When it comes to investing, age isn’t the main game. What truly matters is the length of time you’re planning to keep your money invested
Age and investing
So, does your age have a significant role to play when it comes to starting your investing journey? Not really.
The key ingredients for beginning to invest are some spare cash that you don’t need right away and a bit of patience to let this money grow over time. Investing isn’t about quick wins; it’s a marathon, not a sprint.
